MINT: Emerging Economies
Economists and business people alike know of the BRICs – Brazil, Russia, India and China – as the ‘emerging economies’. This term was coined by economist and retiring chairman of Goldman Sachs Asset Management: Jim O’Neill (Welham, P., 2013). As with most definitions in academic circles, there is no strict definition of this term. However, there is a general consensus around it. Emerging Economies are countries, or a group of countries (that form one mega-economy e.g. Africa) that have many characteristics of a developed country (like England) but are held back by constraints since they are still subject to many limitations which restrict developing countries (The Economist 2013).
I have been learning about the BRICs on my Business Management course at the University of Kent. With all due respect, I do not think that the BRIC countries are the most important emerging economies of late. With extensive research, I found a string of surprising data which strongly suggests that it is the MINT group which are: Mexico, Indonesia, Nigeria and Turkey (Rachman, G., 2015) that are more interesting.
This new found information intrigued me hugely because I knew very little about these economies; and my view of Nigeria was far from the truth of what Nigeria’s economy is actually like.
Table 1: MINT Economic Indicators
|Country||Population(million)||GDP PPP2013($billion)||GDP Nominal2013(billion)||GDP Per Capita2013($)||GDP Per Capita Nominal2013($)||Exports2012($billion)||Imports2012($billion)||Trade2012($billion)||HDI2012|
Source: IMF 2014
Key Words & Definitions:
GDP:is the market value of all officially recognized final goods and services produced within a country in a year, or over a given period of time (Kishtainy 2012).
GDP Nominal: GDP that has not been adjusted for inflation (Kishtainy 2012).
GDP Per Capita: GDP per capita exactly equals gross domestic income per capita. However, due to differences in measurement, there is usually a difference between the two figures (Kishtainy 2012).
GDP Capita Nominal: The same as above but not adjusted to inflation (Kishtainy 2012).
Purchasing Power Parity: A way of estimating national income by showing the number of currency units required to buy the same amount of goods and services in another country as one currency unit would buy at home (Kishtainy 2012).
Human Development Index: Developed by the United Nations to measure and rank countries’ levels of social and economic development. The HDI makes it possible to track changes in development levels over time and to compare development levels in different countries (Kishtainy 2012).
An exponential and rapid expansive growth of the middle class combined with a large proportionate decline of poverty rates in Mexico is suggesting the idea to many world-renowned economists that Mexico will have a higher GDP than most European countries except for a few (e.g. United Kingdom and Germany) by 2050 (World Bank 2014). This new-found wealth has created a multiplier effect. A multiplier effect takes place when there is an increase in spending in one part of the economy which leads to bigger effects in other parts (Investopedia 2014). Without going into too much detail, the graph below shows a model of how the multiplier effect works. AD1 indicates where the economy operates initially. The multiplier effect causes aggregate demand to increase to AD2 and therefore leads to an increase in Y, which is GDP.
Indonesia is an interesting economy. Mexico and Nigeria are well known for their economic potential although they are also known for their economic constraints. Turkey, to my mind, had always been a decent economy – nothing special. My research has proved the opposite.
Mr O’Neill predicts that Indonesia will be 7th in the world for GDP by 2050 (Bloomberg View 2014). Indonesia is the 4th most populous country in the world. It is also the 10th largest economy by nominal GDP, contributing to the world economy by 2.5%. Indonesia is only the world’s 27th largest exporter; however, it is one of the very few economies that can produce a trade surplus year after year (US Department of State: Diplomacy In Action 2014).
Nigeria and corruption are two words that seem to go hand-in-hand. However, I find that to be a grossly over-popularized stereotype. For the most part, Nigeria is a promising economy which is on track to become one of the 20 largest economies in the world by 2020. Nigeria’s GDP is the 3rd highest in Africa and its manufacturing sector is the 3rd largest in Africa (Online Nigeria 2014).
China has witnessed great growth over the last decade; however, to the surprise of many, Turkey’s economy grew faster than China’s last year. Turkey’s economy grew by 10.5%. It was the 3rd largest growth in the world last year (Economics 2014). Unlike Russia and China, Turkey does not make most of its economic value via exports. Instead, much like the Industrial Revolution in Victorian Britain, it comes mainly from the construction industry. This makes up 30% of Turkey’s economic value (All About Turkey 2014).
Mean wages are amongst the highest in the world at $8.71; there are 28 billionaires in Istanbul; and many economists (also the CIA) assert that Turkey should be officially a developed country (Michigan University 2014).
All About Turkey, 2014. Turkish Economy. [online]. Available at: http://www.allaboutturkey.com/economy.htm
Economist, 2013. When giants slow down. [online]. Available at: http://www.economist.com/news/briefing/21582257-most-dramatic-and-disruptive-period-emerging-market-growth-world-has-ever-seen
Economist, 2014. The mask is off: Political turmoil exposes economic malaise. [online]. Available at: http://www.economist.com/news/finance-and-economics/21593496-political-turmoil-exposes-economic-malaise-mask
IMF, 2014. Countries.[online]. Available at:http://www.imf.org/external/country/index.htm
Investopedia, 2014. Multiplier Effect. [online]. Available at: http://www.investopedia.com/terms/m/multipliereffect.asp
Kishtainy, N. 2012. The Economics Book. London: Dorling Kindersley
Michigan University, 2014. Turkey: Economy. [online]. Available at: http://globaledge.msu.edu/countries/turkey/economy/
Rachman, G., 2015. Sweetness of Mint economies still entices. Financial Times. [online]. Available at: http://www.ft.com/cms/s/0/8f3926bc-3141-11e5-91ac-a5e17d9b4cff.html#axzz3rOj1k5x0
Online Nigeria 2014. An Overview of The Nigerian Economic Growth and Development. [online]. Available at: http://www.onlinenigeria.com/economics/
US Department of State: Diplomacy In Action, 2014. U.S Relations with Indonesia. [online]. Available at: http://www.state.gov/r/pa/ei/bgn/2748.htm
Welham, P., 2013. Jim O’Neil in BRICS and MINTs, education is fuel for growth. Times Higher Education. [online]. Available at: https://www.timeshighereducation.com/comment/opinion/jim-oneill-in-brics-and-mints-education-is-fuel-for-growth/2009537.article
World Bank, 2014. Countries: Mexico. [online]. Available at: http://www.worldbank.org/en/country/mexico/overview